Correlation Between Netflix and IShares NASDAQ
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By analyzing existing cross correlation between Netflix and iShares NASDAQ 100, you can compare the effects of market volatilities on Netflix and IShares NASDAQ and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Netflix with a short position of IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and IShares NASDAQ.
Diversification Opportunities for Netflix and IShares NASDAQ
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Netflix and IShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 and Netflix is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Netflix are associated (or correlated) with IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of Netflix i.e., Netflix and IShares NASDAQ go up and down completely randomly.
Pair Corralation between Netflix and IShares NASDAQ
Given the investment horizon of 90 days Netflix is expected to generate 1.29 times more return on investment than IShares NASDAQ. However, Netflix is 1.29 times more volatile than iShares NASDAQ 100. It trades about 0.17 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.09 per unit of risk. If you would invest 59,697 in Netflix on September 3, 2024 and sell it today you would earn a total of 28,984 from holding Netflix or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 75.34% |
| Values | Daily Returns |
Netflix vs. iShares NASDAQ 100
Performance |
| Timeline |
| Netflix |
| iShares NASDAQ 100 |
Netflix and IShares NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netflix and IShares NASDAQ
The main advantage of trading using opposite Netflix and IShares NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, IShares NASDAQ can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares NASDAQ will offset losses from the drop in IShares NASDAQ's long position.| Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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